Tag Archives: Finance

Property purchase costs – transfer tax reduction

When considering to purchase a property in Spain, it is important to account not only for the purchase price of your dream home also the associated acquisition costs. When buying an existing property (not a new build), the largest cost is the Property Transfer Tax. Since April 2021 (Decree-Law 7/2021) the Andalucian government reduced this tax to a fixed rate of 7%, (previously this Tax ranged from 8% to 10% depending on the property purchase cost). This new fixed rate incentive was due to end 2021.

The good news is that that towards the government declared that this reduced rate would remain in place for the future. Therefore a flat rate of 7% is fixed and applies on second hand housing transactions. Additional to this the government reduced the Stamp Duty from 1.5% to 1.2% on newly build property purchases.

Other costs to keep in mind when buying a home in Southern Spain include legal fees, usually 1% of the property purchase cost, Notary Fees and Land Registry fees. In total budget approximately 10% acquisition costs and then you will not be left caught out when a dream house is in your reach.